Orissa HC Stays Consolidated SCN Issued Under GST Act for Multiple Assessment years

Dilip Kumar Swain Vs. Deputy Director, DGGI, BBSR and others (Orissa High Court)

In Dilip Kumar Swain vs. Deputy Director, the Orissa High Court addressed a challenge to a show cause notice (SCN) issued under Section 74 of the Odisha Goods and Services Tax Act, 2017. The SCN consolidated tax periods from July 2017 to March 2024, prompting the petitioner to argue that such consolidation contravenes the Act’s provisions. Referring to Section 74(10), the petitioner pointed out that the prescribed limitation period for issuing SCNs is five years from the due date of filing the annual return for a specific financial year. The petitioner, an unregistered dealer during the relevant period, also contended that Section 74 was inapplicable in their case.

The Court noted the petitioner’s reliance on a Karnataka High Court ruling in Veremax Technologie Services Ltd. vs. Assistant Commissioner of Central Tax, which held that consolidating multiple tax periods in a single SCN violates statutory provisions. Pending further proceedings, the Court granted interim relief by staying the impugned notice. The case was adjourned to January 3, 2025, allowing time for the revenue department to file a counter-affidavit. This decision highlights ongoing judicial scrutiny of procedural compliance in GST assessments.

FULL TEXT OF THE JUDGMENT/ORDER OF ORISSA HIGH COURT

1. Mr. Harichandan, learned advocate appears on behalf of petitioner and submits, impugned is show cause notice dated 1st August, 2024 issued under section 74 of Odisha Goods and Services Tax Act, 2017 for period commencing from July, 2017 to March, 2024. Referring to, inter alia, sub-section (10) in section 74 he submits, there is prescribed period for issuance of notice as within five years, inter alia, from due date of furnishing of annual return for a particular financial year. Furthermore, his client being an unregistered dealer, provision in section 74 does not apply to it.

2. He relies on view taken by a learned single Judge in the High Court of Karnataka in Writ Petition no.15810 of 2024 (T-Res) on judgment dated 4th September, 2024 (Veremax Technologie Services Ltd. v. Assistant Commissioner of Central Tax). The learned judge held, consolidation of multiple assessment years into single show cause notice contravenes the provisions. He seeks interference, interim at the stage.

3. Mr. Satapathy, learned advocate, Senior Standing Counsel appears on behalf of revenue and draws attention to definitions section 2(106) to submit, meaning given to ‘tax period’, when applied to the show cause notice brooks no interference. He submits further, as on date of issuance of the show cause notice, petitioner had obtained registration.

4. Petitioner is relying on view taken by a learned single Judge against consolidation of tax period. In the circumstances, the writ petition requires hearing.

5. Counter be filed by 17^th December, 2024 as prayed for by Mr. Satapathy. Petitioner may file rejoinder, to be accepted on adjourned date upon advance copy served.

6. List on 3^rd January, 2024. Impugned notice will remain stayed till next date of hearing.